Waitrose has revealed it is to open a second ‘dark’ store to fulfil online orders as the grocer battles to meet demand from shoppers in London next year.
The new depot in Coulsdon, South London will double Waitrose’s capacity to deliver groceries to online shoppers and will despatch twice as many orders per week as its existing dark store in Acton.
It is set to open in autumn 2014 and will complement picking online orders from 153 stores nationwide and through its Acton warehouse.
The purpose-built, six acre site will feature an 80,000 sq ft picking space - twice the size of that at Acton - and allow up to 50% more items to be picked per hour and up to 50% more drops per van to be made per week.
Sales within the M25 tripled last year to represent 20% of all Waitrose online sales and total ecommerce sales jumped 40.6% in the first half of this year.
Weekend delivery slots from Waitrose have become difficult to obtain and large numbers of shoppers rely on supply from Ocado.
Waitrose’s capacity to meet online shoppers’ demand for its products has been under scrutiny since relationships with Ocado became strained.
Waitrose managing director Mark Price said earlier this year the grocer had moved to “DEFCON1” in ramping up its online expansion plans after delivery partner Ocado agreed to aid Morrisons in its online food launch.
Price had instructed lawyers to examine the Ocado and Morrisons deal but earlier this month told Retail Week there is “goodwill on all sides”.
Ocado boss Tim Steiner told Management Today this week: “It was a misunderstanding. I had a chat with Charlie (Mayfield, chairman of the John Lewis partnership) and he’s fine. QCs and contract breaches were not mentioned. There is no bad will.”
Waitrose said its new warehouse builds on its model in Acton, whereby staff pick from aisles in a customer-less store and features more efficient navigation as well as a self-contained chilled picking room which will reduce refrigeration costs.
Shoppers in the capital whose orders are fulfilled by the Coulsdon warehouse will be able to choose from one-hour delivery slots between 6am and midnight and continue to get free delivery on orders over £50.
Independent analyst Nick Bubb said: “Acton was never a perfect solution, as it is an old John Lewis warehouse, so it will be good to see Waitrose up and running with a purpose-built ‘dark store’ in Coulsdon.
“By 2017 [when Waitrose and Ocado’s contract has a break clause] Ocado is likely to have a third warehouse of its own and they could decide to dump Waitrose, but in practice common sense is likely to prevail and their loveless marriage will carry on.”
Waitrose said its new facility will help meet specific customer requests such as green bananas or extra thick slices of ham. The move echoes Morrisons boss Dalton Philips’ claim that the grocer will use its fresh food credentials to differentiate its offer on its online food launch next January.
Waitrose retail director Rob Collins said: “Demand from Waitrose.com shoppers in the capital has soared over the last year. Our dotcom fulfilment centre in Acton will reach capacity in 2014, and we have been looking for the right location for a second for some time.
“The facility in Coulsdon provides the perfect, purpose-built site for us to take what we have learnt from Acton and step our online operation up a gear.”